In an Economy in Which Velocity Is Constant and Real

question 181

Multiple Choice

In an economy in which velocity is constant and real output grows at an average rate of 3 percent per year, a 5 percent average rate of growth in the money supply would result in a

• A)constant price level
• B)slowly increasing price level
• C)slowly decreasing price level
• D)stable 4 percent growth in real GDP
• E)stable 4 percent growth in nominal GDP